Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


NZ Exporters Urged To Look To South Africa

New Zealand exporters are being urged to look to South Africa, a country with an emerging consumer market with increasing purchasing power and a high propensity to spend, and a country that has a huge range of product needs.

Trade New Zealand’s representative in Johannesburg Michelle Cohen arrives in New Zealand this week for a two week visit (22 October – 6 November) and says she wants to raise awareness of South Africa as an exciting, albeit challenging export market, with good prospects for sustainable growth.

Note to editors – Michelle Cohen will be visiting Christchurch (22-25 Oct), Wellington (25-27 Oct), Nelson (27-29 Oct), Hamilton (29-31 Oct), Tauranga (31 Oct – 1 Nov), Auckland (1-6 Nov).

“I’ll be talking to companies about the benefits of trading with South Africa and highlighting specific sector opportunities and how Trade New Zealand can help turn those opportunities into commercial results.”

Cohen says she’ll also be pointing out some of the advantages South Africa offers over other developing export markets.

“The community is friendly, competitive, English speaking and much like
New Zealand in many ways. It is politically and economically stable and has a solid infrastructure.”

Cohen says although the disposal income of the white middle class is reducing, there is a potentially much larger, growing Black middle class which aspires to the finest quality branded goods and services and has the money and propensity to afford those products.

In the year ending June 2000, New Zealand exported $80 million to South Africa, up 10 percent on the previous year, ranking it alongside markets like Iran and Brazil. Main export items are currently casein, lamb, radio-telephone equipment and frozen vegetables.

While New Zealand exports to South Africa have increased steadily since trade barriers came down in the mid-90s, Cohen believes we could be doing a lot better.

She says New Zealand is perceived positively in South Africa, but it’s a somewhat limited perception that somewhat predictably focuses on rugby, sheep and wine.

“While New Zealand is seen as being green and clean and its people friendly, ethical and good sportspeople, its products are still widely speaking, unknown. There is no real appreciation of the high quality and high tech products now coming out of New Zealand.”

She says South Africa is a unique market, in that it has both first world and third world aspects in the one country. That opens up a broad range of export opportunities.

“New Zealand telecommunications companies are one sector that have focused on South Africa and this has paid dividends in terms of foreign exchange earnings. Along with IT, it’s an area that will continue to offer excellent potential.

“The national telecommunications agency Telkom is in the midst of putting out a tender worth NZ$300 million which will be split into nine or 10 projects and which Trade New Zealand is encouraging Kiwi companies to seriously consider.”

She says there are also good sector opportunities for New Zealand businesses in the marine industry, with a demand for parts and spares and new innovative products. Ironically Cohen says many of South Africa’s boatbuilders have emigrated to New Zealand, hence the demand for imported products.

“Another growth area is engineering, building and construction. There is a renewed focus on low cost housing. The property market has gone into a climb just recently, adding interest to both residential and commercial opportunities.

“New Zealand consultants who do so well in many other parts of the world will also find opportunities in South Africa, in capacity, building and government transformation, and in many areas of education and training.”

Cohen says Kiwi specialty food exporters are already picking up on the South African fascination for novel and new products. As with a lot of countries, she warns South Africa has stringent labeling requirements for foodstuffs and other products, such as electronic goods. Packaging too must comply with requirements.

Agritech and pasture management companies will also find a demand for their expertise, says Cohen, with South African farmers seeking ways of working more effectively and cost effectively, and adding value to their crops.
New Zealand electric fences are already exported to South Africa, initially for farming, and expanding into security and game ranches.

On a wider level, Cohen says South Africa is the springboard into the greater sub Saharan African region, recently named by the Economist’s Intelligence Unit as the fastest growing region in the world.

“The easiest way to trade with the SADC countries is to forge links with a South African partner who is experienced and knowledge in that region. Africa has a reputation of officious red tape, bad business ethics, bribery and corruption, as well as limited foreign exchange. Good South African traders have had a lot of experience in handling those issues and would prove a viable partner to
New Zealand business people looking to expand northwest of South Africa.”

While problems of corruption in business in South Africa have all but been stamped out, Cohen says crime is an issue, though not to the extent it is portrayed by the international media, and probably no worse than in many other parts of the world.

A greater challenge for New Zealand exporters is the changing and confusing local environment in South Africa. Cohen says her office spend a lot of time assisting companies through the red tape.

“We help them deal with national and local government officials, establishing requirements to doing business, and complying with legislation that would not apply elsewhere such as labour legislation and Black empowerment issues.”

Despite the bureaucracy, Cohen says South Africa has a thriving business environment. “It is the world’s 21st largest exporter and 24th largest importer. The country is politically sound, with a smooth transition of power from Nelson Mandela to President Thabo Mbeki. The country is economically sound, and a statement by Standard and Poor’s that they intended to upgrade South Africa to “investment grade” early in the new year has triggered a flow of investment from the UK and the USA.”

Cohen emphasises that New Zealand companies – new or experienced – who want to explore the South African market must be committed to supplying the market, and also to forming enduring client relationships.

“Companies need to visit the market often and keep in close contact in order to maintain relationships. This is considered very important to South Africans.”

For more information contact:
David Robertson
Market Services Manager Australia, Pacific and South Africa
Trade New Zealand, Ph: 04 496 6414

© Scoop Media

Business Headlines | Sci-Tech Headlines


Snail's Pace: Aucklanders Face Frustrating Commute Over Harbour Bridge

Journeys into Auckland's CBD took longer than usual as traffic banked up around the damaged Harbour Bridge. More>>


Statistics New Zealand: COVID-19 Sees Record 12.2 Percent Fall In New Zealand’s Economy

Gross domestic product (GDP) fell by 12.2 percent in the June 2020 quarter, the largest quarterly fall recorded since the current series began in 1987, as the COVID-19 restrictions in place through the quarter impacted economic activity, Stats NZ said ... More>>


Climate: Scientists Release ‘Blueprint’ To Save Critical Ecosystems And Stabilize The Earth’s Climate

A group of scientists and experts produced the first comprehensive global-scale analysis of terrestrial areas essential for biodiversity and climate resilience, totaling 50.4% of the Earth's land. The report was published in Science Advances ... More>>


MPI: Independent Review Launched Into Assurances For Safe Transport Of Livestock By Sea

The Ministry for Primary Industries (MPI) has launched an independent review of the assurances it receives for the safe transport of livestock by sea. MPI Director-General Ray Smith says Mike Heron QC has been appointed to lead the review, which is expected ... More>>


Computers: New Zealand PC Market Grows Nearly 40% Due To Work From Home Demand

COVID-19 had large impacts on demand for PCs as businesses prepared for lockdowns by purchasing notebooks to mobilise their workforce. In the second quarter of 2020, New Zealand's Traditional PC market experienced a 39.7% year-on-year (YoY) growth ... More>>


Ministry of Health: Public Transport Distancing Requirements Relaxed

Physical distancing requirements on public transport have been reviewed by the Ministry of Health to determine whether they are still required at Alert Level 2 (or below). The Ministry’s assessment is that mandatory face covering and individuals tracking ... More>>


NZHIA: New Zealand Hemp Industry Set To Generate $2 Billion Per Annum And Create 20,000 Jobs

A new report says a fully enabled hemp industry could generate $2 billion in income for New Zealand by 2030, while also creating thousands of new jobs. Written by industry strategist Dr Nick Marsh, the report has prompted calls from the New Zealand Hemp ... More>>


Stats NZ: One In 14 Employed People Report High Risk Of Losing Jobs

About one in 14 workers say they expect to lose their job or business by mid-2021, Stats NZ said today. A survey of employed people in the June 2020 quarter showed 7 percent felt there was a high or almost certain chance of losing their job or business ... More>>

ASB Quarterly Economic Forecast: NZ Economy Doing Better Than Expected, But Challenges Remain

August lockdown estimated to have shaved 8% off NZ’s weekly GDP, and 0.5% off annual GDP Economy now expected to shrink 5% (year-on-year) by end of 2020 Unemployment rate now expected to peak at 7.2% The latest ASB Quarterly Economic Forecast is less ... More>>


SAFE: Live Export Ship Carrying 5,800 New Zealand Cows Goes Missing In East China Sea

Livestock carrier Gulf Livestock 1 sent a distress signal at 4:45am NZT yesterday in the East China Sea. The area is affected by Typhoon Maysak. At 4pm a patrol plane spotted a lifeboat - with no people in it - and a man in lifejacket nearby. The ship ... More>>


FMA: Kiwisaver Fees Don't Match Performance

The Financial Markets Authority (FMA) today published an independent report into the passive and active investment management styles [i] used by KiwiSaver providers. The FMA commissioned MyFiduciary to test the extent that KiwiSaver providers were ... More>>